Finance News

New Universal Credit Rules will Affect 200,000 People

Em Morley - March 5, 2015

New rules in the Universal Credit scheme could leave 200,000 claimants waiting six months for their benefits. The changes have caused concern over a potential rise in rent arrears.

The new regulations were laid in Parliament last week and have been described by social housing providers as likely to lead to an increase in difficulty and evictions.

New Universal Credit Rules will Affect 200,000 People

New Universal Credit Rules will Affect 200,000 People

At present, the Department for Work and Pensions (DWP) calculates a person’s Universal Credit monthly. If they earn over a certain threshold that month, their entitlement is reduced or removed. Under the new rules, the DWP will take six months of previous earnings into account.

This means that for a claimant who earns a higher amount in one month, but nothing the next month, they may be unable to claim for up to six months. The change only applies to those making repeating claims within six months of a previous claim ending.

The DWP predicts that up to 200,000 claimants will be affected by the change when it comes into force on 6th April 2016. This would be almost ten times the number hit by the £26,000-a-year benefit cap.

The change will see claimants receiving irregular income having to plan and set savings aside for when they are not working, as they may not be in receipt of their benefits.

Responding to a previous consultation on the rules, the National Housing Federation says: “Any additional delay in tenants’ ability to access the right support will further increase the possibility of poverty.”1

London housing provider Peabody said that there will be an “obvious area of hardship” for claimants who work seasonally. They added: “With the accruing rent arrears, there is every chance of people facing eviction.”1

Other groups expressing worry are Community Housing Cymru, the Scottish Federation of Housing Associations (SFHA), Golden Gates Housing Trust, and Wheatley Group.

Last week, the Government announced that it has changed the finalised regulations to let claimants earn up to £300 more in one month than the next without being affected, halving the amount of people expected to be hit. The changes hope to stop those who can choose when they get paid from maximising Universal Credit.